THE KD FACTOR LIMITED

Executive Summary

THE KD FACTOR LIMITED shows strong signs of financial health with significant growth in net assets and excellent liquidity, typical of a well-managed micro-entity operating in specialized health and education services. While the company is stable and solvent, enhancing the equity base and planning for measured growth will be critical to sustaining its financial wellness. Regular monitoring and diversification will help maintain resilience amid future challenges.

THE KD FACTOR LIMITED - Analysis Report

Company Number: 13188471

Analysis Date: 2025-07-29 17:16 UTC

Financial Health Assessment Report for THE KD FACTOR LIMITED

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1. Financial Health Score: B

Explanation:
THE KD FACTOR LIMITED demonstrates a generally sound financial position with solid growth in net assets and strong working capital. The company’s financial statements reveal healthy liquidity and an improving balance sheet over recent years, which are positive "vital signs." However, the micro-entity size and limited asset base suggest some vulnerability to external shocks or operational pressures. This earns a grade of B, indicating good financial health but with room for improvement and caution as the company grows.

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2. Key Vital Signs and Interpretation

Metric	2024 Value (£)	Interpretation
Fixed Assets	1,663	Small long-term investment; stable but limited fixed base.
Current Assets	28,679	Strong short-term resources, mainly cash/debtors.
Current Liabilities	7,376	Relatively low short-term debts, manageable.
Net Current Assets	21,303	Positive working capital indicating liquidity strength.
Net Assets / Shareholders’ Funds	22,396	Equity base growing steadily, showing retained earnings or capital growth.
Share Capital	1.00	Minimal initial capital; growth mainly from retained earnings.
Employee Count	1 (including director)	Very small operation, likely owner-managed.

Trend Analysis:

• Net Assets increased from £9,933 in 2023 to £22,396 in 2024, more than doubling, a strong sign of improving financial stability.
• Net Current Assets nearly tripled from £8,255 to £21,303, showing improved liquidity and ability to cover short-term obligations comfortably.
• Fixed assets slightly decreased (from £2,218 to £1,663), which may reflect depreciation or disposal of assets, not alarming due to the asset-light nature of the business.

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3. Diagnosis: Overall Financial Condition

Healthy Cash Flow and Liquidity:
The company’s working capital (Net Current Assets) is robust and significantly positive, indicating excellent liquidity. This "healthy cash flow" symptom suggests the business can comfortably meet its short-term liabilities without stress.

Growth in Equity Base:
The doubling of net assets and shareholders’ funds in one year indicates good retention of profits or capital injections, strengthening the company’s financial backbone. This is akin to a strengthening heart muscle pumping more effectively.

Micro-Entity Size and Limited Capital:
The minimal share capital (£1) and small scale of operations (one employee) point toward a lean structure — a small but efficient organism. However, this also means the company may be sensitive to market shocks or operational risks given limited financial buffers beyond working capital.

Industry Context:
Operating in "Other human health activities" and "Other education not elsewhere classified" sectors implies reliance on specialized skills and services rather than heavy asset investment. This aligns with the low fixed assets and personnel count.

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4. Recommendations: Improving Financial Wellness

1. Strengthen Capital Base:
Consider increasing share capital or securing additional funding to build a more resilient equity base. This will provide a buffer against unforeseen expenses or downturns, akin to building stronger bones for structural support.

2. Maintain and Monitor Liquidity:
Continue managing cash flow prudently to preserve the strong net current assets position. Regularly monitor debtor collections and creditor payments to avoid liquidity "symptoms of distress."

3. Diversify Revenue Streams:
Explore opportunities to expand service offerings within the health and education sectors. This diversification can reduce risk and improve income stability, like broadening the diet to strengthen overall health.

4. Plan for Growth:
Given the company’s positive trajectory, plan for scaling operations carefully. Hiring additional staff or investing in technology could enhance capacity but requires careful cash flow forecasting.

5. Regular Financial Reviews:
Implement quarterly financial health check-ups to detect early warning signs of financial stress and ensure ongoing compliance with micro-entity reporting requirements.

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